On behalf of the defendant-appellant, the cause was
submitted on the briefs of Scott L. Schroeder of Scott L. Schroeder, S.C., Janesville.

Respondent

ATTORNEYS:

On behalf of the plaintiff-respondent, the cause was
submitted on the brief of Robert I. DuMez of Alia, DuMez, Dunn & McTernan, S.C., Kenosha.

2013 WI App 126

COURT OF APPEALS

DECISION

DATED AND FILED

September 25, 2013

Diane M. Fremgen

Clerk of Court of Appeals

NOTICE

This opinion is subject to
further editing.If published, the
official version will appear in the bound volume of the Official
Reports.

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.

2013AP60

Cir. Ct. No.2009CV1541

STATE OF WISCONSIN

IN COURT OF
APPEALS

Midwestern Helicopter, LLC,

Plaintiff-Respondent,

v.

William Coolbaugh,

Defendant-Appellant,

Jon P. Orlos and Pathfinder Indemnity Company LTD,

Defendants.

APPEAL
from a judgment of the circuit court for Kenosha County:s.
michael wilk, Judge.Affirmed.

Before
Brown, C.J., Neubauer, P.J., and Gundrum, J.

¶1NEUBAUER, P.J.This
case is about the conversion of a helicopter when it was allowed to be used
beyond the scope authorized by its owner.A managerial employee of Midwestern Helicopters, LLC (Midwestern),
allowed a pilot to take a helicopter on a skydiving job after the owner of
Midwestern had established a policy that commercial events required his written
permission.The pilot ended up hitting a
power line and crashing the helicopter.Midwestern sued both the employee and the pilot for conversion and
negligence.The theory of the case was
that the employee and the pilot took the helicopter without permission from
Midwestern and property damage resulted.The case was tried to the court, and the trial court ruled that the
employee’s unauthorized permission to the pilot to take the helicopter out for
the skydiving event, along with the resulting damage, constituted
conversion.We agree and affirm.

FACTS

¶2Midwestern is a small company that bought, sold and repaired
helicopters, provided helicopter flight instruction, provided charter
helicopter transportation, and arranged with contract pilots to sell helicopter
rides at community events.John Parrish
is the sole member of Midwestern.At
some time during 2008, he decided he wanted to get out of the helicopter
business.Among other preparations for
sale, Parrish decided to stop doing “commercial event work,” because this
aspect of the business was losing money.Commercial event work was when an event entity, for example an airshow
or a snowmobile festival, would arrange with Midwestern to have a helicopter at
its event.The public would be able to
purchase helicopter rides at the event.Midwestern would get paid per ticket, depending on how many people it
flew.

¶3To communicate his
decision regarding commercial events to all those involved with scheduling
and/or flying the helicopters, Parrish put a notice on Midwestern’s online
scheduling program, where pilots would schedule use of helicopters, that said,
“No commercial events without written permission from Midwestern
Helicopter.”Parrish also communicated
this new policy to the defendant William Coolbaugh at a June 5, 2008 meeting.Coolbaugh
managed the maintenance, flight instruction, and commercial work at Midwestern.

¶4The accident happened on July 4, 2008, when Jon Orlos, a
contract pilot for Midwestern, crashed after hitting power lines.Coolbaugh had given Orlos permission to take
a Midwestern helicopter to Skydive Chicago, an event at which Orlos would take
up skydivers for jumps.Orlos apparently
took some passengers on a side sightseeing trip when he flew low enough to hit
power lines and crash, severely damaging the helicopter.

¶5Midwestern sued Coolbaugh and Orlos for the loss of the
helicopter, alleging conversion and negligence.[1]Orlos did not answer the complaint, and a
default judgment was entered against him.The case between Midwestern and Coolbaugh was tried to the court.The court found that Coolbaugh controlled the
helicopter, that he gave Orlos permission to take the helicopter without the
owner’s consent, and that there resulted serious interference with the rights
of the owner to possess the helicopter due to the resulting crash and $384,819
in damages.The trial court concluded
that Midwestern had proven its case for conversion but that it had not met its
burden of proof regarding negligence.Judgment
was entered in favor of Midwestern, and Coolbaugh appeals.

DISCUSSION

Coolbaugh’s Appeal and Standard of Review

¶6Coolbaugh raises several issues on appeal.First, Coolbaugh argues that “the trial court
erred when it found Coolbaugh guilty of conspiracy to convert the helicopter”
and that Midwestern failed to meet its burden of proof for conspiracy.Second, Coolbaugh argues that the trial court
“erred when it found that the conversion caused the crash.”Finally, Coolbaugh argues that he is not
liable because of the superseding cause defense and because public policy precludes
liability.

¶8Regarding Coolbaugh’s arguments on conspiracy, Midwestern did
not plead conspiracy, and the trial court did not address conspiracy, much less
find that there was a conspiracy to convert the helicopter.We need not address this argument
further.SeeRock Lake Estates Unit Owners Ass’n v. Township of Lake Mills, 195 Wis. 2d 348, 419-20 & n.5,
536 N.W.2d 415 (Ct. App. 1995) (we need not address arguments unsupported by
references to the record).

Conversion

¶9Conversion is the intentional, unauthorized control of
another’s chattel so as to interfere with the owner’s possessory rights.A person is liable for conversion when he or
she (1) intentionally controls or takes property belonging to another, (2)
without the owner’s consent, (3) resulting in serious interference with the
owner’s rights to possess the property.H.A.
Friend & Co. v. Professional Stationery, Inc.,2006 WI App 141, ¶11, 294 Wis. 2d 754, 720 N.W.2d 96; see also Wis
JI—Civil 2200.The general rule regarding damages for
conversion is that “the plaintiff may recover the value of the property at the
time of the conversion plus interest to the date of the trial.”Metropolitan Sav. & Loan Ass’n v.
Zuelke’s, Inc., 46 Wis. 2d 568, 577, 175 N.W.2d 634 (1970) (citation
omitted).

¶10The evidence supports the trial court’s findings that all three
elements of conversion were present.First, the trial court found that Coolbaugh controlled the
helicopter.Coolbaugh managed the flight
school and maintenance work and oversaw the commercial work.Coolbaugh decided when a pilot could fly a
helicopter on his or her own.Coolbaugh
had authority to give pilots access to the hangar and the key locker.Coolbaugh himself testified that he gave
Orlos permission to take the helicopter to the July 4th event.It is reasonable to infer that Coolbaugh had
control of the helicopter if he gave someone else permission to use it.

¶11Second, the trial court found that Coolbaugh did not have
authority to give permission to take the helicopter to the skydiving event
without the owner’s consent.There was
conflicting testimony about whether Parrish’s ban on commercial events
prohibited all events at which a pilot would take up individuals or only those
that were “on speculation,” in other words, where individuals would pay per
ride and no income was guaranteed.There
was also conflicting testimony about whether Skydive Chicago was a
guaranteed-money event or per participant pay.The trial court found that “Mr. Parrish had made it clear to Mr.
Coolbaugh that no helicopter should be used for an event … [where] the amount
of money being paid was dependent on the unknown number of people that … would
determine how much money might be paid for the helicopter.”The trial court noted that the director of
Skydive Chicago testified that he never made any agreement with Midwestern to
pay an hourly rate and that there was no guarantee.The trial court found that Coolbaugh “had the
helicopter under control and … in his actions in granting Mr. Orlos the right
to take it on the Skydive Chicago, he did it without the owner’s consent.”“[W]hen the trial judge acts as the finder of
fact, and where there is conflicting testimony, the trial judge is the ultimate
arbiter of the credibility of the witnesses.”Noll, 115 Wis. 2d at 644 (citation omitted).The trial court found that Coolbaugh allowed
Orlos to take the helicopter without the owner’s consent.Implicit in this finding is the conclusion
that Coolbaugh understood the scope of the “no commercial events” policy and
deliberately violated it.Given the
conflicting testimony, we cannot say that this conclusion is clearly erroneous.

¶12Finally, the trial court found that there was serious
interference with the rights of the owner based on the $384,819 in damage to
the helicopter.It is reasonable to
infer that this magnitude of damage seriously interfered with the owner’s
rights to possession.The amount was not
disputed at trial.Because the trial
court findings of fact were not clearly erroneous, we uphold them on
appeal.Wis.
Stat. § 805.17(2).

¶13After finding these facts, the trial court made the conclusion
of law that the facts constituted conversion under the elements stated above
andRestatement
(Second) of Torts, § 228 (1965), Exceeding Authorized Use
(hereinafter Section 228), which states:“One who is authorized to make a particular use of a chattel, and uses
it in a manner exceeding the authorization, is subject to liability for
conversion to another whose right to control the use of the chattel is thereby
seriously violated.”This section
“arises most frequently in cases of bailments under contract for a particular
use, but it is equally applicable to a
servant, an independent contractor, a gratuitous user, or any other person
permitted to use the chattel.”Section
228 cmt. a (emphasis added).Furthermore, it is not necessary that an individual convert the chattel
for his own use; if a person takes control in defiance of the owner’s rights,
it is a conversion, for his or her own sake or the sake of another.See Mitzner v. Hyman, 333 S.E.2d 182,
183 (Ga. Ct. App. 1985); see also State ex rel. Kropf v. Gilbert, 213
Wis. 196, 211, 251 N.W. 478 (1933).

¶14The trial court’s conclusion that the facts of the case
constituted conversion is supported by the illustrations to Section 228.

4.A rents an automobile to B to drive to X
City and return.In violation of the
agreement, B drives to Y City, ten miles beyond X City. This is not a conversion.

…

6.The same facts…, except that while the
automobile is in Y City it is seriously damaged in a collision, with or without
negligence on the part of B.This is a
conversion.

Section 228 at 446.These examples illustrate that whether an
unauthorized exercise of dominion constitutes conversion depends on the
severity of interference with the owner’s right to control.Restatement
(Second) Torts § 222A cmt. d. at 433 (1965) (“The question is
nearly always one of degree, and no fixed line can be drawn.”)Here, Coolbaugh knew that Orlos was taking
the helicopter to an event that was prohibited by Parrish’s policy barring
commercial events.Yet Coolbaugh gave
Orlos permission to take the helicopter.When Orlos went to the prohibited event and crashed the helicopter, it
was a conversion, whether or not Coolbaugh or Orlos was negligent with regard
to the accident.

Causation

¶15Coolbaugh argues that the trial court “erred when it found that
the conversion caused the crash” and that we review this as a mixed question of
fact and law.First, there is no
causation element in conversion; the conversion
must result in interference with the
owner’s rights to possess the property.See H.A.
Friend & Co., 294 Wis. 2d 754, ¶11; see also Wis JI—Civil 2200.Second, the trial court did not find that the
conversion caused the crash.The trial
court found that “there was a result of serious interference with the rights of
the owner to possess the property.”

Negligence

¶16The trial court concluded that Midwestern had not met its
burden of proof on negligence.Coolbaugh, understandably, does not challenge this conclusion.Instead, Coolbaugh argues that two defenses
applicable in negligence cases—public policy and superseding cause—should
preclude liability in this conversion case.Coolbaugh cites no authority applying either rationale in a conversion
case.Coolbaugh does not even argue why
these doctrines should apply to conversion as they do to negligence, simply
stating:“The same analysis for
conversion applies here to Coolbaugh.”We decline to import these negligence defenses into this conversion
case, in which the trial court rejected the negligence claim.SeeFritz
v. McGrath, 146 Wis. 2d 681, 686, 431 N.W.2d 751 (Ct. App. 1988) (we
need not consider arguments broadly stated but not specifically argued).

CONCLUSION

¶17The trial court’s findings of facts are supported by the
evidence, and its conclusion that the facts fulfilled the legal standard for
conversion is not an error of law.We
therefore affirm the judgment.

By the Court.—Judgment affirmed.

[1] Midwestern
also sued its insurer, Pathfinder Indemnity, alleging breach of contract for
Pathfinder’s refusal to cover the loss.Pathfinder prevailed on summary judgment,a decision that is not before the court on appeal.

[2] All
references to the Wisconsin Statutes are to the 2011-12 version unless
otherwise noted.